Thought Leadership
We think a lot about risk—and ways to manage it—in a variety of ways. From rising concerns to best practices to exposure assessments, we're sure you’ll find our expert insights valuable.
What you should know about non-admitted insurance
In disaster-prone states, insurance carriers are faced with a basic math reality: They cannot net enough in premiums to justify underwriting large and looming risks, particularly in areas of concentrated wealth. At least not the way they had done previously, which is through state-governed channels that largely determined rates and offerings—a type of coverage termed “admitted.” In California, for example, state regulations prevent carriers from modifying contracts or excluding particular coverage—say, for wildfires—from policies. Nor are they allowed to raise rates in riskier zones without the review and approval from the state. This makes it virtually impossible for carriers to offer coverage that makes economic sense. The proliferation of sophisticated mapping and risk-rating software make the precarious situation even more evident to carriers. As a result, the industry has become more innovative in serving clients in disaster-prone areas, including exploring coverage options that are not governed by the state—a type of coverage termed “non-admitted.” This allows for greater flexibility within the tight margins they face, a strategy we believe will only grow more common in the evolving risk landscape. To that end, we want to educate you further about these options, and help you understand why non-admitted solutions may be beneficial for your portfolio, starting with a clear explanation of the terms: Admitted carriers: States regulate the insurance industry, so carriers that are either based or do business in a specific state, must abide by that state’s rules to be “admitted.” These rules and regulations are largely designed to ensure that carriers: Are currently and will remain solvent, or able to pay out claims. Provide fair treatment to all consumers. In many ways, this arrangement is beneficial to both the carrier and client alike: The state’s imprimatur lends the carrier legitimacy, and that legitimacy puts potential clients at ease. Furthering that sense of trust: the fact that the state will honor claims should the carrier become insolvent, or unable to pay claims. Non-admitted carriers: This describes carriers who opt out of the admission process described above so that they have the freedom to determine their own rates and coverage. These “non-admitted” carriers can still do business in a state; however, they do not earn that states seal of approval, and the state will not reimburse or assist their customers if the carrier is unable to make payouts on claims. Such carriers offer an important benefit to some consumers: customization. Since they are not beholden to state-controlled standards, non-admitted carriers can more readily offer useful policies to clients whose loss history or location otherwise makes them a coverage risk. For example, consider a client who has had three water losses in as many years and is currently unable to obtain a policy with an admitted carrier. A non-admitted carrier can issue a policy with a high water-loss deductible, offering the client some level of protection while also adhering to the carrier’s business goals and financial health. To be very clear, non-admitted status is not an indication that a carrier will not be able to pay out claims from losses. In fact, many non-admitted carriers have been previously validated by well-respected private auditing agencies such as A.M. Best. With a little research, consumers and brokers can definitively verify the standing of non-admitted firms. What This Means for You In this challenging market, where our goal is to provide you the best possible protection, we maintain relationships with both admitted and non-admitted insurance providers. Of course, we are sensitive to the concern some clients may have about non-admitted coverage. Rest assured, we are diligent in our selection of partners. It is also helpful to keep in mind that, in the end, non-admitted insurance providers are just as incentivized to satisfy clients as admitted ones are. We want you to be able to rely on us to find the best possible coverage options for you and believe that the agility embedded in non-admitted policies makes them a valuable option for many clients. If your account executive suggests a non-admitted policy, know that they will explain why it is the right option and why you can be comfortable trusting it. ...
Read in 4 minutesA guide to protecting your luxury wardrobe collections
A recent Sotheby’s auction was billed as the “Visionary Collection of Joseph Lau,” but it wasn’t the businessman’s art or fine wine – rather, it was 76 luxury handbags. This phenomenal collection included six rare Birkin’s and a bronze Kelly bag that fetched more than $3 million. Other record-breaking sales such as Air Jordans and feted couture exhibits, are just a few examples of the rising passion and interest of luxury wardrobes. Whether you are purchasing such collectibles as an investment, to pass down to future generations, or to wear now, we want to make sure each piece continues to be only a source of pleasure for you. Our guidance below will help keep your cherished collectibles in mint condition and ensure they are properly protected in the event of damage or destruction. Navigating the acquisition process With the luxury market soaring, sadly, fakes are too, especially in the sneaker and luxury handbag categories. The New York Times recently reported on the increasing number of “superfakes”—knockoffs so convincing even the best-trained eye can’t always tell the difference. Being aware of this counterfeit market is important for a variety of reasons, not least because most policies do not protect against fraudulent purchases. Therefore, if you are buying from someone other than an authorized dealer, you’ll want to take the following precautions: Research the seller, including reviews and feedback scores of previous buyers. Beware of discounts; if the item or deal seems too good to be true, it likely is. Educate yourself about the product, so you can confirm relevant details and spot potential issues, such as flaws in stitching and embroidery. Storing your collection safely Humidity, leaks, and harmful cleaning products are just a few of the many perils lurking when your collectibles are displayed or stored away. Therefore, we recommend the following safekeeping best practices: Keep everything in a climate-controlled environment—the industry standard is 70℉, 50% humidity—to prevent damage to leather and fabric goods. Similarly, your closet should not be exposed to direct sunlight or heat sources. Keep unworn sneakers in roomy boxes, to make sure they maintain their shape. Most experts recommend clear plastic since they are stronger than the original box. Empty handbags of everyday items and help keep their shape by stuffing with archival fillers like a purse pillow or acid-free paper. Wrap exposed hardware in a lint-free cloth and remove detachable straps. Store bags and straps in their own breathable, neutral-colored dust bag or the original box. Store hanging garments on non-wire hangers in breathable bags made of muslin or polypropylene. Also, place acid-free paper between folded clothing items, particularly knits and lace shirts.Consider professional storage spaces that cater to owners of couture collections, their sole focus is to properly store and transport clothing, shoes, and accessories. Precautions for wearing collectibles In the event you have that perfect occasion to showcase your couture or cherished accessory, you should consider the following precautions beforehand: Refrain from using oily, alcohol- or perfume-based products on your skin, because contact with them could cause damage to the collectible. Be mindful when eating and drinking, especially staining hazards like red wines. Choose carefully what you place in your handbag and always consider bringing a portable handbag hanger, so you never have to place the bag on the floor. Before storing, dust both the interior and exterior. Preserving the beauty of your collectibles Sneakers that you wear do not need professional cleaning, but they should be kept clean with products that won’t fade their color. However, clothing items or handbags that suffer stains or other marks should be professionally cleaned by a company that has sufficient experience in caring for high-value fashion and accessories. Therefore, look for someone who: Specializes in couture and designer handbags and will outsource to a relevant professional for any work they are unqualified to do on their own. Offers a detailed inspection of each piece and an explanation of what the work will entail. Package items in the appropriate materials, including acid-free paper and breathable garment bags. Protecting your investment Some insurance carriers offer special “wearables” policies, but often we recommend scheduling the items as part of your collectible’s policy. The relevant coverage can vary significantly, though most policies include theft protection, water damage, and other common risks. We suggest you keep a regularly updated list of every item in your collection and be sure to speak with your broker when you acquire a new piece. Also, be sure you check in with your professional to ensure your collection is properly covered. Whether you are drawn to a piece because of its unique features, designer, or storied history – this guide will help keep the original beauty preserved. To ensure your collection will be treasured for years to come, be sure you work with a professional with deep expertise in this luxury market. ...
Read in 4 minutesFiling an insurance claim in today’s evolving market
As we continue to navigate this unprecedented insurance landscape alongside you, our consultative approach to handling your potential claim is more important than ever. With insurance carriers continuing to raise premiums or, worse, decline renewals of long-standing policies, we want you to better understand the broader shift around filing even the smallest claims, which can help safeguard your long-term insurability. As such, our recommendation is that you call us first to discuss any loss or possible claim. To state it as clearly as possible, we never want you to file a claim directly with your insurance carrier before speaking with your personal account executive or with our dedicated, 24/7 claims team (800-221-5830). As your risk management advisors, we will look holistically at your insurance program and offer guidance as to what we think is the best approach for your specific situation, and given the market, so that you can make the most informed decision. This discussion will also allow us to best support your choice and advocate on your behalf. To help you prepare for such a conversation, we have outlined the six key considerations we would explore together before you decide whether to file a claim: 1. Was the loss caused by a catastrophic event? When the answer is yes, our team will most likely advise you to file a claim. The industry codes for catastrophic events like wildfires, floods, major storms, and earthquakes, which allows carriers to isolate related losses and means they will likely not hold that claim against you when it comes time to renew your policy. 2. Was a third party involved? If someone is injured or another person’s property is damaged, we will most likely recommend that you file a claim to ensure your assets are protected. With that in mind, we encourage you not to pull out your checkbook at the scene of a crash in the hope of avoiding an insurance claim, nor should you ever volunteer to cover someone’s losses before consulting our claims team or your account executive. 3. If no catastrophic event or third party was involved, what is your tolerance for paying out of pocket? Our claims experts have begun to ask how much clients are willing to cover themselves. If the cost of replacing whatever you lost falls within this amount, they then generally suggest you do not file a claim. 4. How will filing this claim impact your risk management strategy going forward? Someone who files too many run-of-the-mill claims risks being deemed by insurance carriers as “no longer profitable.” In the end, carriers are businesses that need to earn money to ensure that they can pay out claims while being financially successful, and that has become increasingly difficult to achieve as weather-related events have increased in frequency and severity as well as costs of replacement and reinsurance have risen. Additionally, construction (material and labor) and auto repair costs continue to increase. So, when it comes time to renew, they are paying more attention to claims histories, especially for water damage and auto accidents. That’s all the more reason we might recommend you handle whatever you can on your own, thus preserving your insurance for catastrophic losses. 5. Is there any reason for you to choose not to file this claim? No doubt it is frustrating to pay for insurance and then choose not to use it for a covered claim. However, after our discussion, you may decide that it’s not worth filing the claim as it could impact your future insurability and once you lose coverage it is very hard and expensive to get it back. If that’s the case, we will recommend other adjustments that may help lower your premiums, such as increasing deductibles or assessing exposures and coverage to make sure you are paying only for what you need. 6. Can we help you be even more proactive about preventing future losses? As you no doubt know, an ounce of prevention can save you thousands in repairs. This is why we regularly educate our client’s around proper maintenance. It’s crucial for you or your caretaker to do things like caulk around windows, clear drains and gutters of debris and check that the sump pump is operational. Taking the time to walk around your home and find the spots where a small investment will prevent a loss that in turn will save you money and effort in the future. And we are happy to provide further guidance and best practices if there is anything we can do to help in this process. Our primary goal is always to protect you and your family's long-term interests. This is why we will work together to guide and advocate for you throughout the claims process. And it’s why we hope your first step will be a call to our team and not the carrier. We can advise on the steps required to handle your immediate loss and keep you insured long-term, as we have done for clients for more than a century. ...
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